Supported housing shortages costing NHS mental health services £102m a year

A shortage of supported housing in communities across England is costing NHS mental health services an estimated £102 million a year and leaving patients stuck in hospital despite being clinically ready for discharge, according to a new report.

The report, Breaking the Cycle: Supported Housing as an Enabler of Mental Health Hospital Discharge and Community Mental Health Service Delivery, published by the Royal College of Psychiatrists (RCPsych), Look Ahead and the National Housing Federation, found that delays linked to a lack of supported housing resulted in 121,695 additional hospital bed days in 2024/25.

The organisations warned that shortages in supported housing are contributing to delayed discharges, repeat admissions and increasing pressure on already overstretched mental health services. Patients waiting for supported housing accounted for 22% of all delayed discharge days in mental health inpatient services during the year.

The report said supported housing costs around a third of the price of an inpatient bed and estimated that greater investment could save the NHS between £53 million and £65 million annually.

Demand for mental health beds continues to outstrip supply, with more than 95% of urgent and emergency mental health beds in hospitals across England occupied, well above the 85% occupancy level recommended by the RCPsych. Between 2019 and 2024, the NHS in England spent more than £1.4 billion on private mental health beds to address capacity shortages, while £164 million was spent on adult acute inappropriate out of area placements in 2023/24.

The findings build on a 2025 RCPsych survey of psychiatrists across the UK, which found many services were struggling to meet growing demand for mental healthcare. Clinicians reported being forced to make difficult decisions about admissions and discharges based on bed availability, while gaps in community provision, including crisis care and supported housing, were contributing to relapse and readmission.

Dr Jon Van Niekerk, chair of the Royal College of Psychiatrist’s Faculty of General Adult Psychiatry, said: “Across hospital services, many patients are clinically ready for discharge but experience delays due to a lack of appropriate housing and community support options. At the same time, some individuals leave hospital into accommodation that does not adequately meet their needs, which can increase the risk of relapse and readmission. This pattern places additional strain on individuals, families, and the wider health and care system.

“Secure and appropriate housing is a fundamental component of effective mental health care. Greater alignment between health and housing policy is essential to ensure people can leave hospital safely and sustain their recovery in the community. Strengthening this interface has the potential to improve outcomes, reduce pressure on inpatient services, and support more efficient use of public resources.”

The organisations behind the report are calling on the UK Government, NHS England, Homes England and the Greater London Authority to commit to long-term funding for supported housing, alongside greater rent flexibility and stronger integration between housing and mental health policy.

Chris Hampson, chief executive at Look Ahead, said: “Every year we support hundreds of people with mental health needs to move out of hospital and rebuild their lives in the community. When supported housing is available, people recover faster, avoid relapse and don’t cycle back through inpatient care.

“But when the right housing and support isn’t there, people are left waiting in hospital beds they no longer need, at huge cost to both individuals and the NHS. Supported housing must be recognised and funded as core mental health infrastructure, not as an optional add-on.”

The report also highlighted the experiences of people using supported housing services. Salma, 20, who moved into Look Ahead’s Hope Place service in Slough after spending six months in hospital, said: “If this place wasn't here when I came out of hospital, I would have likely had to go back to my family's house if there was nowhere else to go. That would not have been beneficial for me as I would have most likely relapsed.

“Here, it's homely, supportive and comforting. I have not been back in hospital since I came here. I've 100% come a long way.”